New Delhi, NFAPost: Fintech company One97 Communications Ltd, owner of the Paytm app has got the nod from the market regulator Securities and Exchange Board (Sebi’s) to raise Rs 16,600 crore through an initial public offering (IPO).
The Noida-based digital payments company hopes to list its shares on the Indian stock exchanges in November.
Paytm is expected to file its red herring prospectus with the regulator next week. The IPO, touted to be the biggest ever in India, surpasses the Rs 15,000 crore raised by government-owned Coal India in 2010. The IPO will comprise a fresh issue of equity shares of Rs 8,300 crore and an offer for sale (OFS) by existing shareholders of Rs 8,300 crore.
The company plans to use Rs 4,300 crore of the fresh issue to grow its existing business lines and acquire new merchants and customers. Paytm plans to earmark Rs 2,000 crore for business initiatives, acquisitions and strategic partnerships and up to 25 per cent of the total fund raised through the IPO for general corporate purposes.
Investment banks, including Morgan Stanley, Goldman Sachs Group Inc., Citigroup Inc. and ICICI Securities Ltd, are managing the share sale. Based on investor feedback, the company is seeking a valuation of $20-22 billion and in its last fundraising Paytm was valued at $16 billion.
It has been in talks with investors Abu Dhabi Investment Authority and Singapore’s GIC Pte to participate in the IPO. BlackRock Inc. and Nomura Holdings Inc. were also in discussions to bid for Paytm’s IPO.
Paytm was launched in 2009 as a mobile-first digital payments platform to enable cashless payments by its founder and chief executive Vijay Shekhar Sharma. The company has expanded beyond digital payments into newer categories of lending, gaming, wealth management, financial services and digital commerce.
For the year ended 31 March, Paytm’s consolidated revenue shrank 11% to Rs 3,187 crore while its revenue from operations stood at Rs 2,800 crore from 114 million transacting users, but it managed to cut losses by 42% to ₹1,701 crore. However, under the risk factors of its draft documents, Paytm said it has incurred losses for three consecutive years and doesn’t expect to be profitable in the foreseeable future.
Paytm said it had facilitated 7.4 billion transactions, including transactions made to merchants via its ecosystem.
